Rotarians 'honored' by Parnell appearance

Gov. speaks on range of topics at breakfast meeting

Governor Sean Parnell spoke on topics including oil and gas, health care exchanges and offshore drilling in a question-and-answer session the Juneau Gastineau Rotary Club on Thursday morning at the Prospector Hotel.

Governor Sean Parnell spoke on topics including oil and gas, health care exchanges and offshore drilling in a question-and-answer session the Juneau Gastineau Rotary Club on Thursday morning at the Prospector Hotel.

Rotarians attending the weekly breakfast meeting of the Juneau-Gastineau Rotary Club this Thursday at T.K. Maguire’s got to hear from — and pose questions to — a very high-profile guest.

Gov. Sean Parnell was the club’s featured speaker Thursday morning, and he addressed a wide range of topics, including oil tax reform, funding for education and his proposed supplemental budget, which were supplied by Rotarians themselves.

“We’re going to have a modified press conference,” said Parnell, before calling on people from around the room to name a subject they wanted him to discuss. “I’m going to do it in a little different way, because I want to talk about what you want to hear about. I want to talk about issues that you’d like to hear something about.”

Parnell, whose term as governor will expire next year, said he was raised by his parents to be mindful of other people.

“When I think about priorities for what I’d like to accomplish with the rest of this term, it’s about creating opportunities for others in the state,” Parnell said, naming his “Choose Respect” campaign against domestic violence and sexual assault, as well as his push for oil production tax reform and support for an in-state natural gas pipeline, as examples.

Parnell contends that his proposal on oil taxes — which would modify the current tax structure by eliminating or reconfiguring certain tax credits and removing the progressive mechanism from the 25 percent production tax, among other changes — will lead to increased oil production and, in the long run, buoy Alaska’s finances.

Those themes were reiterated at the Rotary Club breakfast Thursday.

“I also pursue new oil production, because I think that creates new opportunity,” said Parnell. “And so when we can come together and agree that declining production doesn’t have to be the future in Alaska, when we have plenty more oil that belongs to Alaskans in the ground, that we can get that out of the ground and benefit Alaskans.”

Another subject Parnell was asked to address was education funding.

Many school districts, unions and Democratic legislators, as well as some Republican legislators, have fretted over the lack of a Base Student Allocation increase in Parnell’s proposed budget. No BSA increase this year would mark the third year in a row that the amount, which is a major education funding formula component, has remained at $5,680.

“Legislators and I, we originally thought ‘forward-funding’ education would actually help school districts,” Parnell said, supplying air quotes with his finger. “Well, it doesn’t seem to be, because you know, they still don’t know what gets added to the formula funds that are ‘forward-funded.’ And yet legislators and the governor’s office gets blamed for cutting education when there have been no cuts.”

Parnell said K-12 education funding has increased by $245 million over the past three years, but the high school graduation rate remains below 70 percent. His goal for education, which he outlined during his State of the State address last month and reiterated Thursday, is for that rate to improve to 90 percent by 2020.

“How are we going to get there?” Parnell asked rhetorically. “We have to get there by doing things differently. It’s not going to be about pouring money into the same system and expecting the same results. And so we’ve asked school districts and teachers to be innovative and creative and tell us how to get to 90 percent, because this is not working.”

Parnell continued, “So when people have said, ‘Why don’t you support a BSA increase?’ And I say, ‘Well, if we increase the BSA this year, we spend $50 million, $100 million, $200 million extra dollars, how does that translate into an increase in graduation rate?’”

Kaye Kanne, who founded the nonprofit Juneau Family Health and Birth Center, asked to hear Parnell’s thoughts on Medicaid expansion — a provision of the Affordable Care Act from which many Republican governors, including Parnell, have opted out.

“We worked hard to contain costs in Medicaid,” Parnell said. “In fact, this year is one of the lowest years of increases that we’ve seen in Medicaid. In fact, we just put forward our supplemental budget. And what does the word ‘supplemental’ mean to you? … It means ‘extra,’ doesn’t it? Well, we actually asked for decreases in general fund spending in our supplemental budget.”

The $24.5 million supplemental budget for fiscal year 2013 includes a nearly $2.6 million reduction in net general fund spending and an $11 million reduction in general fund agency operating spending.

The difference between the general fund spending decreases and the overall supplemental budget increase is made up by other state and federal receipts.

After Parnell concluded, he took a couple of questions.

Fielding a question from John Pugh, chancellor of the University of Alaska Southeast, on reports that the United States is on track to become energy-independent next decade and potential effects that might have on oil prices, Parnell circled back around to his oil tax proposal.

“It all means potentially lower commodity prices,” Parnell said. “That’s exactly why I’m working now to get oil production change that’s fair to Alaskans and that protects us against those low prices, because I don’t want us to have to be writing a check for a million dollars in tax credits when we don’t have the money to cover it.”

Including the questions he answered at the end, Parnell’s remarks took just under half an hour.

After Parnell left, Juneau-Gastineau Rotary Club President Annette Smith described herself as “really pleased with what he had to say.”

“I think I can speak for the club: we were really honored that he took time out of his schedule, particularly during legislative session when they’re all really busy, to come speak to us,” Smith said. “It’s a great honor. We’re really, really excited.”